Actually, Deutsche Bank's retention bonuses are more cunning than we thought

John Cryan is a cunning old dog. As we've thoroughly reported, Deutsche Bank's CEO isn't awarding proper bonuses to anyone above associate vice president level this year. He is, however, awarding "retention bonuses" to Deutsche's most prized staff, and these retention bonuses have been structured in an interesting way.

This still stands, but Deutsche insiders say the retention bonuses have been structured with some added twists. Firstly, for the deferred stock bonuses to be valid, Deutsche's shares only have to hit €23 during the first three trading weeks of 2021. If, at any time during that period, the stock price falls below €23, the retention bonuses now being allocated for 2016 will be worth nothing at all. Secondly, if the €23 condition is met, recipients of the bonuses will get their holdings increased by a factor of 1.8.

Deutsche isn't commenting on its bonuses, but the all or nothing structure seems designed to whet the appetite of risk-taking traders. 2021 is far enough away for recipients to hope Deutsche's share price will rebound: the stock was trading at €39 as recently as January 2014.

Unfortunately, it may not be having the desired affect. Headhunters say the recipients are pretty skeptical. "There are people there who are up 40% on this year and they're being paid no cash and handed this structure," says one. She adds that only 40% of the deferred bonuses are being paid in stock with the remainder paid in deferred cash. As a result, the stock segment subject to the vesting requirement is too small to make much of a difference. "You're looking at MDs who are receiving $300k bonuses, with $150k paid in this stock," says the headhunter. "If this all works out, they'll get $270k in four years' time. A lot of people are going to decide that's not worth waiting around for. "